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China’s total yuan funds outstanding for foreign exchange declined in June [Getty Images]
China’s State Administration of Foreign Exchange (SAFE) said it “will continue to push forward construction of the monitoring system and further enrich its policy options to prepare for possible scenarios”, according to an official statement.
Capital flight from China has been an increasing concern due to rising expectations that the United States will end its quantitative easing programme.
Financial institutions including China’s central bank sold a net $6.7 billion of foreign currency in June.
China’s total yuan funds outstanding for foreign exchange declined in June, marking the first drop since December last year.
SAFE has asserted it “expects the flows to be basically balanced in the second half of the year”.
During the mid-year conference, the administration also pledged measures to facilitate trade and investments, as well as steadily promote the yuan’s free convertibility under the capital account.
Policymakers and market participants need to adapt to two-way capital flows in the future, the regulator added.
The Asian nation’s economy has slowed down to 7.5 per cent in the second quarter of this year.
Source: Agencies
